What is Shopify Payments Gateway & How to add it to your shopify store?

Shopify Payments

When you search Google for “ecommerce”, you will find yourself to be away from a couple of clicks from a link to Shopify

Today, Shopify is one of the largest eCommerce vendors that hosts over 5,00,000 businesses. Thanks to the presence of its definite set of tools, Shopify is the true example of a leading ecommerce solution that provides businesses of all shapes & sizes to scale their operations and revenues. 

However, one of the major drawbacks of using this platform is the card processing payments. For a long time, vendors had to rely on different third-party vendors to initiate payments into their accounts, making the entire process more complicated and expensive. To add to the expenses, Shopify had its own charges for processing such payments.

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Interestingly, with the introduction of Shopify’s ultimate payments gateway solution, ‘Shopify Payments’ is a thing of the past. 

Yes, it’s possible now! This article deals with Shopify payments and how you can include them in your store. Let’s get started. 

What are Shopify payments? 

Shopify Payments is its kind of payment platform that allows vendors to accept payments digitally. The platform eliminates the hassle around integrating your Shopify platform with a paid, third-party solution provider. 

Interestingly, this platform allows you to access functionalities beyond accepting payments. 

Shopify Payments allows vendors to check their payouts, directly via the admin panel. 

What if we told you that it was just the tip of the iceberg? Yes, there’s more to this payment gateway. Let’s have a look at the advantages of opting for Shopify payments over other third-party providers. 

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Advantages of Shopify payments over other payment providers

Shopify is one of the first in its genre to create a payment gateway for its platform and allow vendors to transact seamlessly. While the payment solution is only limited to certain countries, the advantages are vast. 

Let’s explore some primary benefits of using the payment gateway for your Shopify store: 

1. No transaction fee on Shopify

Currently, the platform charges its vendors anything between 0.2-0.5% as commission on sales. Interestingly, the use of Shopify Payments allows you to waive the commission, saving you over costs of sale and ultimately adding to the profit margins.

2. Reduced fee for credit card processing

The majority of the payment providers charge some 3% as a flat-rate for accepting credit card payments for your store. While the charges aren’t much, they can add to the lump over time. 

Interestingly, the use of Shopify Payments reduces the basic 2.9% processing fee to a much pocket-friendly rate. 

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3. Get instant approval 

Few payment providers take days, sometimes weeks to approve and process your payments. However, things are on the fast-track with Shopify Payments as you get instant approval and the entire process takes just minutes. 

4. Track real-time money

When you start accepting payments over Shopify, you can easily manage your payments and transactions under one centralized dashboard. This way, it saves you from the troubles of having a separate account. Further, the payment gateway allows you to access different analysis and management tools.

5. Seamless pay-outs and reconciliation of sales

When you integrate Shopify Payments to your platform, you can easily manage multiple aspects of your business and accept payments seamlessly. Further, when you have all your accounts over one platform, you can easily accept and reconcile with payments, as and when needed.

Yes, the advantages of using such a payment integration are huge and you want to begin accepting payments via Shopify already. 

Now, let’s have a walkthrough of all the requirements that you need to align to, before accepting payments over such a platform. 

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What are the requirements for Shopify Payments?

The Shopify Payments option is currently limited to stores around certain regions and countries. Listed below is a set of all the supported countries & regions that allow you to accept different payment methods when you create your store.

Supported countries and regions

Here are the supported countries & regions available to accept Shopify payments:

  • Australia
  • Germany
  • Hong Kong SAR
  • Austria
  • Belgium
  • Canada
  • Denmark
  • Netherlands
  • New Zealand
  • Singapore
  • Japan
  • Spain
  • Sweden
  • Ireland
  • Italy
  • United Kingdom
  • United States (This payment option is not available in US territories excluding Puerto Rico.)
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Prohibited businesses

Similar to all the supported countries and regions for your business, there are certain regions where businesses and services are not permitted for payments. 

Here’s a list of prohibited business or services over the Shopify payments platform:  

  1. Adult content and services
  2. Unauthorized or Counterfeit goods
  3. Gambling
  4. Proprietary rights or Intellectual property infringement
  5. Illegal or Regulated products or services
  6. Sanctions
  7. Services or Products prohibited by law or Shopify’s financial partners
  8. Multi-level marketing
  9. Substances designed to mimic illegal drugs
  10. Video game or virtual world credits

How to Setup Shopify Payments? 

Setting up your Shopify payments is one of the most essential steps to accept payments.  Once you have set up your payment options, the customers can easily purchase products using their credit/debit cards. 

Now, before we have a look into the steps to set up the payment gateway, let’s have a look at the different aspects of payments by the platform. 

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Accepting Payments  

While Shopify Payments enables your store to automatically accept payments from all the leading payment methods, the rate of card use is based on your subscription model. 

The Shopify subscription plans charge different rates for payments by different users.

Listed below is a list of payment methods that you can accept from different parts of the world:

  1. eCommerce platforms accepting payments from the United States can accept payments via American Express, Visa, Mastercard, Discover, Elo, JCB, and Diners Club credit and debit cards.
  2. Businesses based in Hong Kong SAR, Australia, Italy,  Ireland, Singapore, Spain, New Zealand, and the United Kingdom can accept payments via Mastercard, Visa, and American Express credit & debit cards.
  3. eCommerce businesses from Japan can accept payments via Mastercard, American Express, JCB, and Visa debit and credit cards.
  4. Canada-based businesses can accept payments from Mastercard, Visa, and American Express credit & debit cards. Additionally, vendors from Canada that use Shopify’s POS can accept payments made in Interac debit cards for transactions held in-store. 
  5. Businesses from Denmark are entitled to accept payments via Mastercard, American Express, and Visa cards (credit & debit). However, if you want to allow users to pay using MobilePay, you need to enable such a setting over the Shopify Alternative payment methods.
  6. Germany-based businesses can receive payments via Mastercard, American Express, Visa credit and debit cards, SOFORT, Bancontact, or even Klarna Pay Later.
  7. Businesses based out of the Netherlands can accept payments via Mastercard, Visa, and American Express cards. Further, they can also accept payments using Bancontact and iDEAL.
  8. Belgium-based businesses can accept payments via American Express, Visa, and Mastercard credit & debit cards. Other options include iDEAL and Bancontact.
  9. Businesses operating in Sweden can accept payments via Mastercard, American Express, and Visa cards. Other modes of accepting payments include Klarna Pay Later, Klarna Pay Now, Bancontact, and Klarna Slice It.

Requirements of personal information for accepting Shopify Payments

When you deal with businesses across national boundaries, you are required to provide relevant information around your business, due to the regulatory changes in the registered country. 

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Further, this information helps in identifying the merchants that use Shopify Payments to accept payments. These regulations help the platform to process payments without much disruption by the e-vendors. 

Requirements of Bank account to incorporate payments over Shopify

Before you set up Shopify Payments for your store, ensure that your store aligns with the suggested options:

  1. Your bank account is a checking account with complete details, or a current account (for Ireland and the UK).
  2. The registered bank account uses a similar currency for payouts, as it is used in the local region.
  3. The registered account is ready to accept payments via electronic transfers from different banks.

Further, a majority of individual regions also have their own local requirements that these accounts must follow. Suggested below are the rules:  

  • Australia – Bank accounts present with a ‘physical’ center in Australia that accepts payments in local currency (AUD) are allowed for transfers using BECS.
  • Austria – The registered bank accounts should be accepting payments in Austria’s local currency (EUR) and must be eligible for SEPA transfer. Further, it should also comprise of IBAN that includes the following letters: CH, CY, DK, EE, ES, GB, GR, AT, CZ, HU, IE, DE, FI, FR, NO, IT, GI, LT, LU, LV, MT, NL, PL, RO, SE, SI, BE, BG, PT, or SK.
  • Ireland – The registered account should have its physical presence in Ireland and must accept payments within the country. The mode of acceptance should be EUR, and the account should be eligible to use FPS transfers.
  • Italy – The account submitted to the platform must be a business account, accepting payments in the EUR currency. Further, it should also be ready for SEPA transfers, and include IBAN, with letters: CY, AT, BE, BG, CZ, LT, LU, DE, DK, CH, EE, ES, LV, FI, FR, GB, MT, NL, NO, GR, GI, HU, RO, SE, SI, IE, IT, PL, PT, or SK.
  • Canada – The registered bank account must have a physical existence in the country, accept payments in CAD, and should also be eligible to accept ACH transfers.
  • If the payout currency accepted by you is in USD, the bank should be physically present either in the USA or Canada. Further, it should be accepting ACH transfers.
  • Denmark – If you select EUR as your payout currency, the bank account should be eligible to comply with SEPA transfers. Further, it should also include IBAN, starting with any of the following letters: CZ, MT, NL, SI, DE, GI, HU, CY, ES, DK, EE, CH, AT, BE, PT, IT, LT, RO, SE, BG, FI, FR, PL, GB, GR, NO, IE, LU, LV, or SK. However, if you have set DKK as your payout currency, then the bank should be accepting payments in DKK and also accept SEPA transfers with IBAN that start with the letter DK.
  • Japan – For Japan-based accounts, the account should be a Futsu account, accepting payments in JPY currency and have a physical presence in the country.
  • The Netherlands – The account should be a business account, accepting payments in EUR currency. Further, the registered account should also be eligible for SEPA transfers, and allow IBAN transactions with letters: EE, AT, GB, GR, GI, CZ, CH, BE, BG, CY, ES, FI, DE, DK, FR, LV, MT, IE, PT, SI, HU, IT, LT, LU, RO, SE, NO, PL, NL or SK.
  • Germany – The registered account should be accepting payments in EUR currency and be eligible to accept SEPA transfers. Further, it should also be accepting IBAN with initials that begin with: CZ, ES, FI, AT, DE, DK, EE, PT, GI, HU, IE, RO, SE, SI, BE, BG, GB, LU, LV, CH, CY,  GR, IT, FR, MT, NL, LT, NO, PL, or SK.
  • Hong Kong SAR – For bank accounts in Hong Kong, the account must be from a bank with physical existence in the country and accept HKD currency.
  • Spain – For accounts registered in Spain, it should be accepting payments in EUR currency and receive SEPA transfer. The suggested account should also be receiving IBAN that includes the letters: PL, DE, MT, NL, DK, EE, PT, RO, CZ, FI, IE, IT, AT, BE, ES, LT, LU, FR, GI, HU, LV, NO, SE, SI, GB, GR, BG, CH, CY or SK.
  • Sweden – If you are receiving payments in EUR, you must have a bank account that is registered with a bank in the country. Moreover, the account needs to be ready to receive SEPA transfers, and allow IBAN transfers that begin with letters: DE, ES, FI, AT, DK, EE, BE, CY, CZ FR, GB, BG, CH, LV, MT, GR, IT, LT, IE, NL, NO, PL, PT, RO, SE, SI, LU, GI, HU or SK. Further, if you receive payments in SEK, your bank account should be receiving a similar currency and allow SEPA transfer, and have IBAN beginning with SE.
  • Belgium – For accepting payments, your bank account must be of standard checking and allow payments in EUR currency. Further, the account should also be entitled to receive SEPA transfers, with IBAN payments starting with: DE, ES, FI, AT, SE, SI, DK, EE, BE, BG, CZ, FR, GB, CH, CY, HU, LT, GR, IE, IT, LV, MT, GI, LU, NL, NO, PL, PT, RO, or SK. 
  • New Zealand –  For accepting payments in New Zealand, the bank must be accepting payments with relevant physical banks in the country. Further, it should be allowing similar NZD currency and allow BECS transfers.
  • United Kingdom – For accepting payments in the United Kingdom, the bank must be accepting payments with UKP currency and have a relevant physical presence in the country, allowing FPS transfers.
  • Singapore – For accepting payments in Singapore, the bank must be accepting payments with SGD currency and have a relevant physical bank in the country. 
  • United States – For accepting payments in the United States, the bank must be accepting payments in local currency (USD) and have a relevant physical presence in the country. It should also be eligible for ACH transfers.

While a majority of the checking accounts present in the list can accept electronic bank transfers of the suggested types. Accounts set up to accept wire transfers don’t work with the Shopify platforms. 

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Let’s check out the entire process of setting up Shopify Payments, divided into several steps:

Step 1: Navigate to the ‘Payments’ section from the ‘Settings’ option under your Shopify admin panel. 

Step 2: In a situation where you haven’t set up payment options with a credit card provider, complete the account setup over the Payments section of the platform.

Step 3: In a situation where you have a different card provider already enabled, select the ‘Activate Shopify Payments’ option that is given in the box. This way, you remove any other payment option by other credit cards in your account.

Step 4: Submit the required details around your store and all the required banking information, followed by saving the details.

Note: Before you set up payments for your store, ensure that you have selected your store currency for receiving payments. Further, you should also submit all the relevant details of your bank account, within the first 21 days of your first sale. 

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Frequently Asked Questions about Shopify Payments

What is Shopify payment?

Shopify payments are of its kind payment gateway that allows vendors to accept payments. With the Shopify Payments integration, vendors no longer need to integrate third-party applications to accept payments. 

How do Shopify payments work on Shopify?

Accepting payments over Shopify Payments is simple. If you have enabled it in your store, you can easily receive payments when a customer pays using the medium. Interestingly, one of the primary advantages of using this platform is that you can receive payments and updates in real-time. 

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Is Shopify payment safe?

Yes, Shopify is completely safe for accepting payments in your store. The payment gateway is protected by a PCI level 1 compliant that is considered to be the highest security standard for accepting payments processed over credit cards.

What payments does Shopify accept?

Shopify accepts payments via all major credit & debit cards from American Express, Visa, or MasterCard. The other payment methods include:

  • Klarna payments
  • PayPal
  • Sofort payments
  • EPS payments
  • Bancontact
  • iDEAL payments
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Now that we have come across the end of the Shopify Payments setting, we hope that you are able to successfully integrate such settings into your bank account. 

Further, considering the benefits that the platform puts on the table, it is an option worth trying. All the best with using Shopify Payments for your store. 

About the author

Ra Karthik

Ramachandiran Karthik is the Digital Marketing Manager at Adnabu. He loves to help Shopify stores grow their business with Google Shopping & Google Ads, using advanced features like multi-currencies, multi-languages, Metafields. Karthik has a lot of experience in digital marketing and enjoys exploring new ways to make advertising more effective for both advertisers and customers.

By Ra Karthik